Learning how to trade stocks and mastering the position of being a stock trader is a very challenging and exciting experience. You need to understand the basics that are essential when just starting on this path. As an investor or trader, you are going to experience a lot of highs and lows along the way, as well as periods of loss and success as well.
In this article, I will be discussing “how to do trading in stock market in India” and more. Keep reading till the end of the article to find out more information about the same!
Different Types Of Stock Markets
Here are two types of stock markets that are there and in which you can invest your money. They are the primary Stock Market and Secondary Stock Market.
1. Primary Market
A primary market is one in which companies issue new securities and then offer them to the common public. Hence, the transaction takes place between buyers and issuers.
2. Secondary Market
In a secondary market, you are going to get the opportunity to both purchase and sell shares in the primary market. This sort of transaction takes place between the buyers and sellers. The broker or stock exchange acts as a form of intermediary in the secondary type of market.
If you sell and buy a share right on the same day, the transaction gets referred to as “Intraday trading”. All that matters at the end of the day is whether the trader investing in stocks books a profit or a loss.
Stock Trading For Beginners
The tips that I will be mentioning here are going to help you in your journey of stock trading:
1. Open DEMAT Account
To enter the share market, first, you need to open a brokerage or DEMAT account. Without opening a DEMAT account, you are not going to be able to trade stocks. A DEMAT account works just like a bank account where you have to hold money to be able to trade. The securities that you end up buying are going to be maintained electronically in your DEMAT account.
2. Gain An Understanding Of Stock Quotes
Stock prices tend to move as per their demand and supply and economic reports. There are also other fundamental factors at play like trader sentiment and profitability. By gaining knowledge about these factors you are going to be able to enhance your understanding of how stocks and the stock market work. This is eventually going to help you in determining the correct price for your enter/exit trade.
3. Bids And Asks
A bid price refers to the maximum price that a stock buyer is willing to pay for buying a stock. The asking price is vice versa. This represents the minimum price at which the seller is willing to be able to sell a stock. To ensure that the trade is profitable, it becomes very important to decide the correct ask and bid price.
Keep reading till the end to find out more information on “how to do trading in stock market in India”!
4. Get A Technical Knowledge Of Stocks
Make sure that you are studying the technicalities of stock before going ahead with planning your trading. A fundamental analysis evaluates the security by measuring its active intrinsic value. It considers factors like expenses, earnings, liabilities, and more. A technical analysis evaluates the stocks based on their volume chart and past prices to predict their future potential.
5. Learn Ways Of Stopping Loss
Volatility is another implicit characteristic of the share market. A beginner needs to gain an understanding of it to be able to prevent any kind of loss. While executing any kind of trade, you need to set a loss price to minimize the potential loss. Failure to put a stop to the loss might have a heavy impact on your total capital.
6. Ask Expert
The share market is unpredictable. Nobody is ever truly able to predict the price of stocks accurately. However, if you take advice from an expert then that is going to guide you towards making the right choice.
7. Start With Safer Stocks
Facing a big capital loss towards the beginning might end up getting your spirit down. A wise choice for these types of cases would be to form short and volatile stocks. This is going to give you an initial slow start but the stocks will most likely sustain a good performance even during tough market conditions.
Frequently Asked Questions
Here is a list of some of the frequently asked questions related to the topic of stock trading in India:
A: To be able to invest in the shares of a company you can opt for the direct purchase plan of the stocks of a company. However, in a majority of cases you also need the services of a broker to be able to do it.
A: It is safe to trade online. All processes of trading stocks are thoroughly monitored and as a result, there is no space for fraudulent practices.
A: No, you do not need experience for being able to start trading with stocks in India. However, it becomes much more important to know the ins and outs of stock trading before investing in them.
A: You are going to get the opportunity of stock trading by enrolling in courses that are offered by the brokerage firms. These courses are going to help you understand the concepts and more refined details of stock trading.
To Wrap It Up!
Investing in stock markets in India can prove to be a very lucrative opportunity for investors who have a diversified portfolio and a long-term outlook. While there are associated risks to it, the growing economy of India makes this an attractive path for investors to seek.
Thank you for reading up till the end of this article. I hope you found the information pertaining to “how to do trading in Stock Market in India” to be useful.
Read more:
- How Many Jobs Are Available In Edp Services?
- How Many Jobs Are Available In Consumer Durables?
- How many jobs are available in consumer non-durables
About The Author
